If Japan Seeks to Control Its Exchange Rates So That

question 10

Multiple Choice

If Japan seeks to control its exchange rates so that ¥100 = $1, which of the following policies should it NOT maintain?

• A) interest rates that provide the same return as alternative international rates
• B) a stable rate of price level changes that will not cause currency depreciation or appreciation
• C) a willingness to raise interest rates when its currency begins to depreciate
• D) a willingness to raise price levels

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Definitions:

Fair Labor Standards Act

A United States federal law that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full- and part-time workers.

Minimum Wage

The lowest wage permitted by law or by a special agreement (such as one with a labor union).

Overtime Pay

Additional compensation paid to employees who work beyond the standard hours designated in their employment contract.

IRS Form 940

A form used by employers in the United States to report their annual Federal Unemployment Tax Act (FUTA) tax.